What minimum ownership interest must the Principal Executive have in the Crave Cookies franchise?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees that the person designated as the "Principal Executive" on the Summary Page is the executive primarily responsible for the Business and has decision-making authority on behalf of Franchisee. The Principal Executive must have at least 10% ownership interest in Franchisee. The Principal Executive does not have to serve as a day-to-day general manager of the Business, but the Principal Executive must devote substantial time and attention to the Business. If the Principal Executive dies, becomes incapacitated, transfers his/her interest in Franchisee, or otherwise ceases to be the executive primarily responsible for the Business, Franchisee shall promptly designate a new Principal Executive, subject to Crave Cookies Franchising's reasonable approval.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, the Principal Executive of a franchise must maintain a minimum ownership interest in the franchise. Specifically, the Principal Executive must have at least 10% ownership interest in the Franchisee entity.
This requirement ensures that the person primarily responsible for the Crave Cookies business has a vested interest in its success. While the Principal Executive doesn't have to manage the day-to-day operations, they must dedicate significant time and attention to the business. This indicates that Crave Cookies wants franchise owners to be actively involved, even if they delegate daily management to someone else.
If the Principal Executive leaves their role due to death, incapacitation, transfer of interest, or any other reason, the franchisee must promptly appoint a new Principal Executive, subject to Crave Cookies's approval. This ensures continuity in leadership and adherence to Crave Cookies's standards. This requirement is fairly standard in franchising, as franchisors want to ensure that franchisees are committed to the business and have a significant stake in its success.